Mounds View approves preliminary budget, December hearing and finalization to come

The Mounds View City Council adopted a preliminary general fund budget and levy for 2020 at its Sept. 9 meeting. 

While exact figures will continue to get nailed down throughout the fall, this was an initial step toward a public hearing and final budget approval in early December.

The council approved a base levy increase of 4.2%, with the total levy increase coming in at roughly 4.6%, taking into account smaller increases for separate categories such as some debt service and a voter-approved police levy.

Now that this preliminary levy has been approved, it can still be reduced prior to final approval in December, though it may no longer be increased.

The city anticipates nearly $7.8 million in total general fund expenditures for 2020, a 5% increase over the current year. Advisory commissions, elections and social service coordination are three categories where residents may notice the largest growth.

 

Areas of growth

A 28% growth in the advisory commission budget is primarily to cover a minutes-taker for the charter commission. In total, the requested budget for all commissions rose from $19,500 this year to a requested $25,000 in 2020.

At a June 3 work session, elected officials and city staff went through the proposed budget page by page. In discussing this increase, City Administrator Nyle Zikmund explained, “[The charter commission] was taking their own minutes and there was some discussion about having more detail and then also allowing the secretary to be free for the discussion.”

The elections budget is set to grow 32% — or $8,500 — in the coming year to account for the 2020 presidential primary. The city’s expenditures in this sector tend to fluctuate year to year, dependent upon the election schedule.

The 40% proposed increase in the social service coordination budget will amount to an overall budget of $36,000 for the department. This change signifies the addition of a new case worker that the city is bringing on through a contract with Northeast Youth and Family Services.

According to Finance Director Mark Beer, the new contractor will be working primarily with the police department.

Another area of significant growth is funding for the Spring Lake Park-Blaine-Mounds View Fire Department, with a significant increase in funds going to the department to help cover capital improvements.

Because Mounds View shares the fire department with Blaine and Spring Lake Park, each city contributes a part of the department’s overall budget. According to Beer, the formula takes into account the average of three years’ worth of fire calls, as well as each city’s tax capacity.

In terms of overall money spent, the largest component of the city’s budget goes toward staff salaries.

“About 70% of our budget is staff, and we are on the lean side as far as staff is concerned, so we’re probably not going to be able to cut staff,” said Beer. “The other things that make up a significant portion of the budget are contractual in nature, and we don’t control those as much.”

Beer noted the fire department as one of the city’s main contractors. He estimated that, in total, salaries and contractual obligations make up over 90% of the city’s budget.

 

Option to lower

 the levy

In discussing the proposed levy increase at the Sept. 9 council meeting, council member Al Hull proposed that the city approve a 3.2% levy increase and use $54,000 from its unassigned fund balance to balance out the general fund.

At this point, a 1% levy increase equates to roughly $54,000 in revenue for the city.

“We’ve got Ramsey County looking at a 5% increase,” said Hull of the county’s proposed property tax levy. “The school district, I think, is going to look for a levy which I think will pass. That’s quite a bite out of folks’ checks.”

Mayor Carol Mueller agreed.

“We need to be cognizant of those folks in our community who are living on a fixed income or in a job that doesn’t have as generous of raises as we might hope to cover these additional expenses that are beyond the city’s control,” she said.

Council members Bill Bergeron, Sherry Gunn and Gary Meehlhause were all in favor of keeping the base levy increase at 4.2% with the option to decrease it later.

“We can always lower it when we have to finalize [the budget] in December. But, if we lower it now, we’re just cutting our own throat, in my opinion,” said Meehlhause. “We’re increasing our own deficit.”

Including the levy increase — as well as all other sources of funding — the gap between the city’s proposed expenditures and revenues will still be roughly $245,000.

Bergeron pointed out that when the council revisits the budget to give its final approval, the November election will have passed and the council will know the status of the proposed school district levy increase.

 

Decreasing dependence

The city is trying to become less dependent on local government aid from the state, as well as money from its own levy reduction fund, a $6 million pool it received from the sale of the former Bridges Golf Course to Medtronic.

For 2020, council members have said they are in favor of taking only 90% of available local government aid.

“Less dependence means that when the state runs short and they cut local government aid, our budget is not dependent on it,” explained Beer. “Back in 2002, when the state ran into trouble, they reduced our aid from about $900,000 to zero.”

Mounds View will likely be receiving roughly $700,000 in local government aid in 2020, and will be taking $246,000 out of its levy reduction fund to go toward the general fund budget. This is $4,000 fewer than in 2019.

In addition to a Dec. 2 public hearing on the budget, there will be another city council work session to discuss it in October. In the meantime, Beer encouraged residents to call, email or visit City Hall with any questions. He can be reached at mark.beer@moundsviewmn.org or 763-717-4011.

More information can also be found on the finance department’s web page, www.moundsviewmn.org/government/city_departments/finance/index.php.

 

– Bridget Kranz can be reached at bkranz@lillienews.com or 651-748-7825

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